• Banks often steer clear of lending to startups as they are perceived as high-risk
Image: PIXABAY
Lots of people have great business ideas, but the biggest hurdle is getting the money to turn those ideas into a reality. Few commercial banks are willing to lend to start-up businesses, and for good reason. Startups are risky, with a high probability they may fail to repay loans.
There is one type of debt-free funding available to start-up businesses. Entrepreneurship and innovation awards offer prizes ranging from tens of thousands of shillings to several millions. These awards are funded by governments, NGOs, international organisations, philanthropists, foreign embassies and multinational corporations.
So far this year, three young entrepreneurs were shortlisted in Kenya’s 2023-24 Global Student Entrepreneur Awards competition. The winner, Collins Kathuli, stands to collect Sh100,000 in addition to mentorship and business coaching from leading entrepreneurs.
That’s not all. If successful at the global finals, he could win $100,000 (Sh16 million). It hasn’t been an entirely smooth ride, though.
“This has been my dream for four years and four attempts. You need to keep trying and never give up,” Kathuli said.
Last December, Emmanuel Esekon, an innovator from Turkana county, won Sh500,000 in the Presidential Innovation Challenge Award. According to the Kenya News Agency, Esekon won the prize for using recycled materials to make Turkana traditional artefacts.
A few weeks earlier, during the Kenya Innovation Week, 15 winners from Commonwealth countries each got a cash prize of 3,000 British Pounds (Sh615,000) for their innovations. Among the winners was a Kenyan, Ngatia Muhoya, who innovated the Badilico online forum, designed to connect the youth with decision-makers.
In November 2022, Egerton University student Joseph Nguthiru won $5,000 (Sh800,000) at the East African Youth Innovation Forum. He and his team are extracting the obnoxious water hyacinth weed to create biodegradable alternatives to plastic wrappers and consumables, such as straws, tubers and plastic plates.
That same year, University of Nairobi student Victor Orindi won 15,000 Euros (Sh2.3 million) for helping communities access climate financing from various sources.
This year could see more winners in the coming months. The Redesign Everything Challenge is already accepting entries from innovators whose ideas can “radically redesign the world”, as the organisers put it. Entries close on March 13.
Winners will get 5,000 Euros (Sh875,000) in funding and a development programme that includes online training and mentoring sessions.
“Redesigning everything is first and foremost a call to action,” Richard van der Laken, co-founder and creative director of What Design Can Do, states. “It’s also an invitation to think laterally about how our world should be redesigned, in ways both big and small. Now, more than ever, there is an urgent need for inclusive and circular solutions, and for the transformative and disruptive power of design.”
There were 13 winners last year, among whom was Rethread Africa, a Kenyan team that turns waste vegetable matter into fabrics for the fashion industry.
As expected, there's lots of competition for these awards, but successful entries gain much-needed cash to redefine their products, expand production and reach new customers. Mentorship sessions with leading entrepreneurs offer extremely valuable lessons for upcoming innovators.